Deripaska's Montenegrin Miner May Close

Billionaire Oleg Deripaska's aluminum smelter in Montenegro may close unless it gets aid from the Balkan country's government after plunging metal prices made the plant unprofitable.

"The current economic downturn has left us no alternative but to start talks with the government over an urgent aid package," Peter Lidov, a spokesman for EN+, a unit of Deripaska's Basic Element holding company, said in a statement e-mailed Tuesday. "At this stage, we can't completely rule out a possibility of stopping production."

The closure of Kombinat Aluminijuma Podgorica, which can produce 120,000 tons of the lightweight metal annually, would add to output cuts made by producers including Alcoa and Rio Tinto Group. United Company RusAl, the Russian producer controlled by Deripaska's BasEl, has reduced supplies from its Ukrainian operations as prices trade near a five-year low.

Prices dropped 36 percent last year, the most since 1988, on falling demand from automakers and construction.

Basic Element bought KAP in 2005 and agreed not to halt the plant's modernization, cut jobs or production. All three measures are required to keep the smelter operating, Lidov said. KAP accounts for 51 percent of Montenegro's exports, the company's web site said.